Microsoft Cuts Can’t Cool Seattle Hunger for Code Writers

Microsoft Corp. chief executive officer Satya Nadella said in his memo that while the company is eliminating some jobs, it will add others in certain strategic areas. Photographer: Andrew Harrer/Bloomberg

July 18 (Bloomberg) -- The largest job cuts in Microsoft
Corp.’s history are a recruiting opportunity for Seattle-area
rivals, who see them as a chance to snatch talent.

In a measure of the Redmond, Washington-based company’s
lessening dominance of a regional software industry it all but
created, technology executives say the cuts may only dent a
frenzied job market driven by companies from Amazon.com Inc. to
Zillow Inc. Some entice workers with perks such as free lunches,
paid dry cleaning and, at one startup, a half-share of a
sustainably raised hog for scouting a new software engineer.

“We all have effectively an infinite number of open
positions for software developers, program managers,” said
Spencer Rascoff, chief executive officer of Zillow. “If I
somehow magically filled 100 positions we’d open another 100,
and Amazon would too.”

Microsoft, which is cutting as many as 18,000 jobs
worldwide, says the initial round will affect 1,351 in the Puget
Sound region surrounding Seattle. While those who lost
administrative work may not be as fortunate, software engineers
can pick from more than 6,000 open positions in the Seattle
area, according to the job listings site Indeed.com.

Founded by Seattle natives Bill Gates and Paul Allen in
1975, Microsoft put its operating system on most of the world’s
desktop computers and helped the region diversify its national
identify from airplanes, logging and fish. The software maker is
the state’s second-biggest private employer after Boeing Co.,
with 43,031 Puget Sound jobs as of June.

Growth Drivers

As Microsoft stumbled in newer markets for smartphones and
tablets, companies such as Amazon, which went public in 1997,
and Zillow, a real estate website founded in 2005, have kept
driving growth. Technology companies including Facebook Inc.,
Google Inc. and Groupon Inc. have all expanded their regional
offices, some employing hundreds of people.

“The Seattle area will absorb this very quickly,” said
Steve Shivers, founder of Doxo, a Seattle startup backed by
Amazon CEO Jeff Bezos. “Talent’s in high demand everywhere.”

One company, a food distribution startup called Farmstr,
offers the bacon prize to people who help it find software
engineers to hire. The culinary incentive is a way to avoid
headhunter fees that can reach $25,000, said founder Janelle
Maiocco.

Facebook’s Seattle office advertises 30 open positions and
says benefits include $4,000 in “baby cash” for new parents,
kitchens stocked with snacks and $80 a month for dry cleaning
and laundry. Zillow says its starting salary for Seattle
software developers is $100,000.

Groupon Opening

After opening a Seattle office in May 2012 with 30 people,
Groupon now employs 195 and is looking to hire 75 more, said
spokesman Bill Roberts. The company recently leased a third
floor in its building near Pioneer Square.

“It’s a great talent market for us, and we like the
opportunities we have to grow our presence here,” Roberts said.

The Seattle area’s unemployment rate was 4.8 percent in
June, compared with 6.1 percent nationwide, according to the
Bureau of Labor Statistics.

The concentration of technology workers has helped the
region buck the nationwide stagnation in incomes, pushing up
prices for homes, rent and even sushi.

Since 2008, annual pay for Seattle-area professionals in
science, technology, engineering and mathematics has increased
$14,930, or 18.8 percent. That’s the most of any metropolitan
area with at least 100,000 workers in the fields, according to
data compiled by Bloomberg.

Sushi Prices

By one measure of a professional’s cost of living -- the
price of a basic sushi roll -- Seattle leapt from the sixth-most
expensive U.S. city last year to No. 3 this year, trailing only
New York and Los Angeles, according to data compiled by
Bloomberg Rankings.

Seattle’s median home prices jumped almost one-third in two
years, to $405,742 in May 2014 from $306,371 in May 2012,
according to data provider RealtyTrac. Rents rose 7.2 percent to
$1,139 in 2013, more than double the 3.2 percent increase
nationwide, says Reis Inc., a property researcher.

While Microsoft may be cutting jobs now, over time the
measures promoted by CEO Satya Nadella are likely to make it
more efficient, put it in faster-growing markets and safeguard
its leadership position, said Matt McIlwain, managing director
at Madrona Venture Group, which has invested in companies
including Amazon and Redfin. He said he ran into several
Microsoft executives at a conference this week.

“They’ve got more confidence in the company and themselves
than I’ve seen in quite a while,” he said.

Nadella, only the third CEO in Microsoft’s history, said in
his memo that while the company is eliminating some jobs, it
will add others in certain strategic areas.

“I guarantee you Microsoft is going to keep hiring like
crazy,” said Ed Lazowska, Bill & Melinda Gates Chair in the
Paul G. Allen Center for Computer Science & Engineering at the
University of Washington in Seattle. “They’re just going to
shift their focus.”